Centre monitors trade risks as West Asia conflict spirals

Commerce ministry is engaging with stakeholders to address shipping, insurance challenges

- Dhirendra Kumar & Rhik Kundu

Amid escalating tensions in West Asia, the Centre is closely monitoring potential trade disruptions that could impact exporters, especially due to shipping delays near the Strait of Hormuz and the Red Sea, which are leading to rising costs.

Senior government officials told Mint that the commerce ministry is engaging with stakeholders to address shipping, insurance, and supply chain challenges while exploring new markets and trade agreements to safeguard India's export momentum.

India's exports (merchandise and services combined) rose 2.8% year-on-year in May to $71.12 billion, per data released by the commerce ministry on Monday.

"We are closely watching the situation," a senior commerce ministry official said, requesting anonymity. "We are also calling a meeting of all export promotion councils, shipping lines, container organisations, government departments, and other stakeholders to understand the kind of issues they are facing and how we can resolve them."

Rising freight charges, shipping delays, and limited insurance coverage are already affecting exporters. However, the official cited above said since most contracts are short-term, typically a month, immediate impact may be limited, but prolonged disruptions could hit trade.